United States Court of Appeals

For the Eighth Circuit

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No. 19-1543

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Warren Barse

lllllllllllllllllllllPlaintiff - Appellant

v.

United States of America

lllllllllllllllllllllDefendant - Appellee

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Appeal from United States District Court 

for the District of South Dakota - Sioux Falls

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 Submitted: March 12, 2020

Filed: April 27, 2020

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Before ERICKSON, GRASZ, and KOBES, Circuit Judges. 

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GRASZ, Circuit Judge. 

When C&W Enterprises, Inc. (“C&W”) failed to remit employment taxes, the

Internal Revenue Service (“IRS”) assessed the balance owed against C&W’s former

owner, Warren Barse. Barse filed a lawsuit claiming the IRS misallocated funds it

had levied from C&W, leaving him personally liable for the outstanding taxes. The
district court1

 dismissed for lack of subject matter jurisdiction, finding Barse failed

to file a timely administrative claim or pay the required amount of taxes before filing

suit. Barse appeals both determinations. We affirm. 

I. Background 

From 2004 to 2007, C&W failed to remit employment taxes to the IRS. In

2006, the IRS levied funds from parties who owed C&W money, recovering

$356,212.50. Then, on August 17, 2015, the IRS imposed a $177,750.08 personal

assessment on Barse, placing him on the hook for C&W’s remaining trust liability.2

Barse alleges that in June of 2015 he “objected to the way in which the IRS

administered and applied the levied proceeds.” On December 29, 2015, the IRS

rejected Barse’s “objection.”

Barse then filed suit in federal district court under 26 U.S.C. § 7422(a), asking

the court to reverse the IRS’s determination. Jurisdiction was asserted under 28

U.S.C. § 1346. He argued that, had the levied funds been properly allocated, C&W’s

tax liability would be satisfied and Barse would not be responsible for the missing

taxes. The United States filed a motion to dismiss for lack of subject matter

jurisdiction, arguing Barse had not pled the proper administrative prerequisites, and

therefore, the United States was shielded by sovereign immunity.

1The Honorable Karen E. Schreier, United States District Judge for the District

of South Dakota. 

2Employment taxes (or “trust fund taxes”) are retained by the employer as “a

special fund held in trust for the United States.” 26 U.S.C. § 7501(a). A “person”

who is required to collect such tax and willfully fails to do so is subject to a “penalty

equal to the total amount of the tax evaded.” 26 U.S.C. § 6672(a). The term “person”

includes an officer of a corporation. 26 U.S.C. § 6671(b). Therefore, the willful

failure of a corporation to pay trust fund taxes may lead to personal liability for a

corporate officer.

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The district court granted the United States’ motion on two grounds. First,

before filing suit in federal court, Barse did not file a timely pre-suit administrative

claim for refund as required by 26 U.S.C. § 6511(a). And, even if timely, his

“objection” did not constitute a valid administrative claim for purposes of 26 U.S.C.

§ 7422(a). Second, Barse never claimed to have personally paid the necessary taxes

before filing suit, which is a jurisdictional prerequisite to bring an action for refund. 

II. Analysis

All parties agree that before a taxpayer may file a refund claim in federal court,

the taxpayer must have first made a timely administrative claim and paid the taxes for

which a refund is sought. With this in mind, Barse makes two arguments on appeal. 

First, he argues his “objection” was a proper and timely administrative claim under

26 U.S.C. §§ 6511(a) and 7422(a), because it gave the IRS informal notice of his

claim and was made within weeks of his personal assessment. Second, Barse

contends the funds misallocated by the IRS are the tax payments necessary for

jurisdiction in a refund suit. In order to overturn the district court, both of Barse’s

arguments must be meritorious. We address them collectively, but only find it

necessary to decide whether Barse’s objection was timely. 

We review the existence of subject matter jurisdiction de novo. ABF Freight

Sys., Inc. v. Int’l Bhd. of Teamsters, 645 F.3d 954, 958 (8th Cir. 2011). “Congress

has expressly waived sovereign immunity for suits against the United States by

taxpayers seeking to recover tax refunds.” Kaffenberger v. United States, 314 F.3d

944, 950 (8th Cir. 2003). However, this waiver “must be read in conformity with

other statutory provisions which qualify a taxpayer’s right to bring a refund suit.” 

United States v. Dalm, 494 U.S. 596, 601 (1990). 

Barse first argues the district court erroneously found that he failed to “properly

submit[] an administrative claim” as required by 26 U.S.C. § 7422(a). The required

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administrative claim must be “filed by the taxpayer within 3 years from the time the

return was filed or 2 years from the time the tax was paid, whichever of such periods

expires the later.” 26 U.S.C. § 6511(a). Because Barse did not include the filing date

of the tax return in the complaint, the two-year limitation is applicable here.

Barse also argues the district court erred in deciding he had not paid the

required amount to obtain jurisdiction. Generally, a taxpayer must pay his

outstanding tax liability in order to maintain jurisdiction in district court. See 28

U.S.C. § 1346(a)(1) (permitting an action for the “recovery of any internal-revenue

tax”); Flora v. United States, 362 U.S. 145, 177 (1960) (finding § 1346(a)(1)

“requires full payment of the assessment before an income tax refund suit can be

maintained in a Federal District Court”). Barse instead argues the misallocated funds

levied from C&W satisfy the outstanding liability. And, therefore — if the IRS had

not misallocated the money — they would have the full amount of liability such that

no personal liability was required.

Under Barse’s theory then, the prepayment requirement was satisfied by the

levied funds which the IRS allegedly misallocated. This occurred in 2006. Therein

lies Barse’s problem. If the taxes were paid in 2006, Barse’s administrative claim

— filed in 2015 — was too late under 26 U.S.C. § 6511(a), which requires an

administrative claim within two years from “the time the tax was paid.” In order to

avoid this result, he effectively asks us to start the statutory clock not when the tax

was allegedly paid — as required by § 6511(a) — but when he was personally

assessed in 2015. Even if the funds levied from C&W satisfy the jurisdictional taxpayment requirement under 28 U.S.C. § 1346(a)(1) and Flora, Barse’s argument still

requires us to ignore the plain language of § 6511(a). This we cannot do. 

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Consequently, we need not address whether Barse’s “objection” qualifies as an

adequate administrative claim under 26 U.S.C. § 7422(a).3 It is likewise unnecessary

for us to decide if Barse can claim C&W’s corporate payment as his individual

payment for the purposes of 26 U.S.C. § 7422(a).4

III. Conclusion

Because Barse argues his payment was made in 2006 when the IRS allegedly

misallocated levied funds, his attempted administrative claim in 2015 was more than

two years after the tax was paid. Therefore, Barse’s claim was untimely and the

United States retains its sovereign immunity. We affirm. 

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3Barse notes that we have treated informal claims leniently, so long as they are

in writing. See Kaffenberger, 314 F.3d at 955. But Barse did not plead how, or in

what form, his “objection” was made. For the first time during oral argument, Barse

stated the “objection” was a letter. We offer no opinion as to whether Barse’s

allegation — that he “objected” to the assessment — was enough to survive a motion

to dismiss.

4However, as conceded by the United States, Barse only had to personally pay

an amount equal to one employee’s withheld taxes for one quarter in his individual

capacity to maintain this suit. See Steele v. United States, 280 F.2d 89, 90–91 (8th

Cir. 1960). 

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